A new report has underscored the vital role of the private rented sector (PRS) in Scotland over the past 30 years and called for a more informed, collaborative approach from policymakers.
DJ Alexander Ltd, Scotland’s largest lettings and estate agency, said the findings should serve as a blueprint for future engagement between the Scottish Government and private landlords.
The report, Changing characteristics and motivations of Scottish private rented sector landlords and their investments, was published by the UK Collaborative Centre for Housing Evidence earlier this year.
It complements the Scottish Government’s own long-term analysis of PRS rents and provides insight into how the profile and motivations of landlords have evolved over three decades.
Between 1991 and 2024, the sector has become dominated by small-scale, part-time investor landlords.
The report warns that “in the context of a housing emergency, and with alternative forms of private rented sector provision characterised by low levels of supply, policymakers need to focus on better understanding and supporting the small-scale private landlords that currently make up the bulk of the sector in order to prevent further attrition in terms of landlord and property numbers.”
It also calls for regular landlord surveys and the establishment of a landlord advisory panel to improve communication and evidence-based policymaking.
David Alexander, chief executive officer of DJ Alexander Scotland, said: “The Scottish housing system currently faces unprecedented challenges over supply, affordability, and energy efficiency.
“The pandemic, subsequent cost-of-living crisis, and the current ‘housing emergency’ have, as this report explains, resulted in policymakers scrambling to generate solutions within a system that is not amenable to quick fixes, and which has been subject to years of cumulative legislative change.
“Many unintended, but not entirely unforeseen consequences have arisen in the PRS from recent interventions.
“For example, a rise in rental arrears following the introduction of the ‘eviction ban’ and an increase in market rents following the introduction of the ‘rent cap’.”
Alexander added that the report highlights how recent policies risk discouraging investment in the sector.
“The report found that policies focused on the PRS would appear to discourage private investment and are likely to further exacerbate imbalances between supply and demand. It specifically focuses on the Housing (Scotland) Bill’s introduction of rent controls, and the recent increase in the Additional Dwelling Supplement from 6% to 8%.
“This increasing legislative burden, high costs, low yields, and the availability of lower risk and higher yielding investments elsewhere, have already made the sector less attractive to investment, and there is evidence that landlords are leaving the sector.
“Therefore, it is more important than ever to reflect on what we know about landlords and to use this knowledge to re-evaluate the current direction of travel with the aim of stabilising investment patterns.”
He concluded: “It is clear that this important report contains practical solutions to improving our understanding of the composition of the private rented sector in Scotland and suggests ways in which more effective communication can be developed.
“It highlights the importance of gathering meaningful data to ensure that any future legislation is based on fact rather than opinion.
“Only by engaging with those who are at the heart of the PRS in Scotland will we develop policy which truly reflects the situation and seeks to produce policy which will address the current problems.
“The answer is, as always, the need for greater collaboration, consultation, and communication with landlords and investors to ensure the PRS continues to play an integral role in the supply of homes in Scotland.
“It is only when all parties involved in housing work together will we begin to resolve the current housing emergency in Scotland.”
